Pantera Capital CEO on Outlook for Crypto: ‘Bitcoin Is a Serial Killer’

On 14 November 2018, in an interview with Canada's BNN Bloomberg, Dan Morehead, the Founder and Chief Executive Officer of crypto investment firm Pantera Capital, gave his thoughts on what's next for Bitcoin and other cryptocurrencies.

Why Bitcoin Still Matters

"When a Technology is disruptive, we call it a 'category killer'. Bitcoin is a 'serial killer'. It's going to go through dozens of different industries. One of the last ones, actually, point of sales... It's not very good at that right now. It's great at cross-border money movement. It's great at storing your wealth, especially if you live in a country with a depreciating currency or capital controls... So, it's very good at some things now, and over the next decade, it will get into things like buying a cup of coffee."

How Cryptocurrencies Address Problems of the Financial System of the Developed World

"Think about it this way: there's still a lot of friction if you try to send money from here [Canada] to the UK, right? Very slow. It's literally faster to grab a suitcase of cash, go to the airport, fly all the way to London, because that's going to get your money there quicker. With Bitcoin, you can send it in a few seconds, essentially free. And so that is essentially routing around the payment rails that are very slow and expensive. One way to think about is that the rest of the protocols of the internet disrupted commerce, communication, almost everything else in our lives. They didn't touch banking. They didn't touch credit cards. They didn't touch remittance. And that's what Bitcoin is doing. It is allowing you to route money around those payment rails."

The Difficulty of Getting Into Bitcoin

"It's going to get easier and cheaper to get into Bitcoin. We've even set up a fund that's just a Bitcoin tracker to allow institutional investors to get exposure to it. But that's one of the challenges. Right now, the exchanges are a little bit clunky, they're a little bit expensive, but the fees are coming down very quickly."

The Biggest Challenges for the Crypto Space

"The current one is scalability. It's worked for ten years without any disruptions. It has proved that it is very functional, but we can now only do seven transactions per second, and we have a nice problem that the world's usage of it has grown so fast that it is maxed out. So, the next couple of years are all about scaling these blockchains so that they are able to handle tens of thousands of transactions per second or even hundreds of thousands. And there are a number of projects that we are invested in that could do that. I think at least one or two of those will end up working."

What Makes Him Believe That Crypto Has Staying Power

"Just the general usage of it. Six or eight years ago, there were probably a million people on earth that use. Now, there are probably are 50 million people that use it. I think in a decade there'll be billions of people that use it. So, that's a good indicator. And also you are seeing multi-national corporations embracing blockchain. IBM is talking about it a lot. I just saw an ad for Walmart saying they're going to do lettuce on the blockchain. Pretty wild! And New York Stock Exchange is doing a Bitcoin exchange. Fidelity is doing crypto custody. So, it has now reached mainstream adoption."

People Quitting Their Jobs to Get Into the Crypto Space

"I think a lot of people have realized that this is the trade for the next 20 years. And so they've left their standard jobs to get into the blockchain revolution that has been happening. The entrepreneurs we're investing in have launched major other projects in technology, and now realize that Bitcoin is the next big technological innovation."